Trump’s Iran Remarks Lift Hopes for Peace Deal as Markets Track Oil and AI Momentum: Dow Jones, S&P, Nasdaq, Wall Street Futures
U.S. futures trade cautiously ahead of key earnings
U.S. stock futures were little changed early Tuesday as investors weighed renewed optimism over a possible peace agreement between the United States and Iran while preparing for major technology earnings later this week.
At 03:30 ET, Dow futures were broadly flat, S&P 500 futures slipped 0.1%, and Nasdaq 100 futures fell 0.2%.
Attention on the earnings calendar is turning first to Home Depot (NYSE:HD), which is set to kick off a series of results from major consumer-facing retailers. However, market focus remains firmly on semiconductor giant Nvidia (NASDAQ:NVDA), whose upcoming earnings are expected to offer fresh insight into the strength of the artificial intelligence investment boom that has continued to support equities despite the ongoing Iran conflict.
Wall Street closed mixed on Monday, with the S&P 500 and Nasdaq Composite ending lower while the Dow Jones Industrial Average outperformed, rising 0.3%. Profit-taking in technology shares, rising Treasury yields and elevated oil prices weighed on broader sentiment.
Trump pauses new strikes on Iran
Market sentiment improved later in Monday’s session after comments from President Donald Trump helped reduce fears of further escalation in the Middle East.
According to analysts at Deutsche Bank, Trump’s social media comments helped the S&P 500 recover most of its intraday losses.
Trump said he had halted plans for additional attacks on Iran following requests from several Gulf leaders. The president stated that “serious negotiations are now taking place,” adding that, “in the opinion” of Gulf officials, a “Deal will be made, which will be very acceptable to the United States of America, as well as all Countries in the Middle East, and beyond.”
He also stressed that any agreement would involve “NO NUCLEAR WEAPONS FOR IRAN!” while warning that the U.S. military remains prepared to launch a “full, large scale assault on Iran, on a moment’s notice” should talks collapse.
“The news helped remove some of the risk premium that had built up over the course of yesterday,” Deutsche Bank analysts said.
Iranian state media separately reported that Tehran had submitted a new peace proposal to Washington that would end hostilities across all fronts, include the withdrawal of U.S. forces from areas near Iran and provide compensation for damage caused by American and Israeli strikes.
Oil prices retreat but remain elevated
Brent crude futures were last down 1.8% at $110.07 per barrel. Before the joint U.S.-Israeli military campaign against Iran began in late February, Brent was trading around $70 per barrel.
Investors remain concerned that sustained disruption to global energy supplies could reignite inflationary pressures and lead central banks to maintain or increase interest rates.
The easing in oil prices also helped stabilise global bond markets after recent heavy selling. Yields on benchmark U.S. 10-year Treasuries retreated from more than one-year highs, while the two-year yield also edged lower.
Government bond yields across the eurozone, including Germany, France, Spain and Italy, also moved down, reflecting renewed demand for fixed-income assets.
“While near-term yield volatility may keep markets on edge, current attractive yields and growth risks point to an appealing risk-return profile for short- and medium-maturity quality bonds,” analysts at UBS Global Wealth Management said.
Google and Blackstone launch AI cloud venture
Alphabet’s Google (NASDAQ:GOOG) and Blackstone (NYSE:BX) announced plans to create a new artificial intelligence cloud computing company powered by Google’s proprietary chips.
Blackstone will invest $5 billion and hold a majority stake in the venture, according to a joint statement from the companies.
The project aims to bring 500 megawatts of computing capacity online by 2027, with plans to significantly expand infrastructure over time.
The new company is expected to compete with AI-focused computing providers such as CoreWeave while also strengthening Google’s efforts to commercialise its in-house AI chips, potentially increasing competition for Nvidia.
Japan’s economy grows faster than expected
Japan’s economy expanded at a stronger-than-expected pace in the first quarter, supported by solid private consumption and export activity.
Preliminary government figures released Tuesday showed annualised GDP growth of 2.1% during the January-to-March period, above market expectations of 1.7% and accelerating from a revised 0.8% increase in the previous quarter.
On a quarterly basis, GDP rose 0.5%, beating forecasts of 0.4% growth and improving from the prior quarter’s 0.2% increase.
Despite the upbeat data, economists warned that the economic impact of the Iran conflict could intensify in the coming months, particularly due to higher energy costs affecting Asian economies reliant on imported fuel.
“Japan’s economy approached the Iran war with solid momentum but we think that GDP growth will grind to a halt this quarter and next,” analysts at Capital Economics said.
“Looking ahead, the government’s decision to cap prices of petroleum products means that inflation will remain subdued for now. However, that’s unlikely to last as higher energy prices are lifting prices of imported products and will feed through to higher utility bills in due course.”
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